Cummins Inc (CMI)
Cummins is a Columbus, Indiana based multinational corporation that designs, manufactures, and distributes engines, filtration, and power generation products. Cummins also services engines and related equipment, including fuel systems, controls, air handling, filtration, emission control, electrical power generation systems, and trucks.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is increasing.
- The growth rate of the primary trend is 99.18% per annum.
- CMI price at the close of May 8, 2024 was $289.06 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 58.18% per annum.
- CMI price at the close of May 8, 2024 was higher than the top border of the secondary price channel by $2.62 (0.91%). This indicates a possible reversal in the secondary trend direction.
- The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of CMI price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: October 19, 2023
End date: April 29, 2024
a = 2.2711
b = 0.0019
s = 0.0302
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 99.18%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0302) – 1
= 12.83%
October 19, 2023 calculations
Top border of price channel:
Exp(Y1,120)
= Exp(a + b × X1,120 + 2 × s)
= Exp(a + b × 1,624 + 2 × s)
= Exp(2.2711 + 0.0019 × 1,624 + 2 × 0.0302)
= Exp(5.3971)
= $220.77
Bottom border of price channel:
Exp(Y1,120)
= Exp(a + b × X1,120 – 2 × s)
= Exp(a + b × 1,624 – 2 × s)
= Exp(2.2711 + 0.0019 × 1,624 – 2 × 0.0302)
= Exp(5.2765)
= $195.68
April 29, 2024 calculations
Top border of price channel:
Exp(Y1,251)
= Exp(a + b × X1,251 + 2 × s)
= Exp(a + b × 1,817 + 2 × s)
= Exp(2.2711 + 0.0019 × 1,817 + 2 × 0.0302)
= Exp(5.7615)
= $317.82
Bottom border of price channel:
Exp(Y1,251)
= Exp(a + b × X1,251 – 2 × s)
= Exp(a + b × 1,817 – 2 × s)
= Exp(2.2711 + 0.0019 × 1,817 – 2 × 0.0302)
= Exp(5.6408)
= $281.69
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 99.18% per annum.
- CMI price at the close of May 8, 2024 was $289.06 and was inside the primary price channel.
Secondary Trend
Start date: April 5, 2024
End date: May 6, 2024
a = 9.9975
b = -0.0024
s = 0.0109
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0024) – 1
= -58.18%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0109) – 1
= 4.47%
April 5, 2024 calculations
Top border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 + 2 × s)
= Exp(a + b × 1,793 + 2 × s)
= Exp(9.9975 + -0.0024 × 1,793 + 2 × 0.0109)
= Exp(5.7364)
= $309.94
Bottom border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 – 2 × s)
= Exp(a + b × 1,793 – 2 × s)
= Exp(9.9975 + -0.0024 × 1,793 – 2 × 0.0109)
= Exp(5.6926)
= $296.66
May 6, 2024 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(9.9975 + -0.0024 × 1,824 + 2 × 0.0109)
= Exp(5.6623)
= $287.82
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(9.9975 + -0.0024 × 1,824 – 2 × 0.0109)
= Exp(5.6186)
= $275.49
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 58.18% per annum.
- CMI price at the close of May 8, 2024 was higher than the top border of the secondary price channel by $2.62 (0.91%). This indicates a possible reversal in the secondary trend direction.